As investors look ahead to 2024 ETF provider iShares is pointing to three key areas that will shape the investment landscape.
iShares’ thematic analysis identifies artificial intelligence (AI), medical innovation, and reimagined globalization as the three areas that investors should focus on in 2024. These themes reflect the changing dynamics of the global economy and the emergence of new technologies and trends that are poised to transform various industries.
As the United States’ population gets older, a profound impact on healthcare systems is inevitable. The burgeoning number of individuals reaching 65 will redefine the healthcare landscape. This could present a golden opportunity for forward-thinking companies capable of revolutionizing care. Remarkably, the upcoming year will witness a record number of Americans crossing the threshold of 65.
iShares is firmly optimistic about the role of artificial intelligence in propelling healthcare advancements. It says areas like neuroscience, genomics, and the broader biotech arena are key. The integration of AI has already proven its ability to rapidly process vast amounts of healthcare data, encompassing clinical trials, brain maps, and genetic information, surpassing human capabilities. This accelerated analysis holds the promise of significantly reducing the time and costs incurred by biotech companies in bringing new drugs to market, potentially by 25-50%. Projections indicate that by 2025, generative AI techniques will help to discover over 30% of new drugs.
The AI healthcare market was valued at $9 billion in 2022, with a projected annual growth rate of 40%. This means it could reach an impressive $188 billion by 2031. However, healthcare stocks, particularly those aligned with medical innovation, faced a lukewarm response in 2023 due to high-interest rates impacting their valuations. This apparent underappreciation creates a strategic opportunity for discerning investors.
For investors eager to seize healthcare opportunities amid the evolving landscape of healthcare and AI convergence, a curated selection of ETFs needs consideration. These include: iShares Healthcare Innovation UCITS ETF (HEAL; 0.4%), the iShares Neuroscience and Healthcare ETF (IBRN; 0.47%), the Fidelity Disruptive Medicine ETF (FMED, 0.5%), and the VanEck Genomics and Healthcare Innovators UCITS ETF (CURE; 0.35%). These ETFs serve as a gateway to potentially transformative investments. They offer exposure to the dynamic and rapidly evolving intersection of healthcare and artificial intelligence.
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